2.21What is a bull market?
1What is it?
A bull market is a long period when prices are rising and investors are optimistic. A common rule of thumb is a rise of 20% or more from a recent low.
2Why does it exist?
Bulls attack by thrusting their horns upward, hence the name.
3Stock market example
After the March 2020 COVID crash, Indian markets entered a strong bull run, with the Nifty more than doubling over the next couple of years.
4Diagram
5Risks
- People feel overconfident and take too much risk.
- Bull markets eventually end, sometimes suddenly.
6Quick revision
- Bull market = long rise in prices.
- Higher highs and higher lows.
- Optimism can turn into overconfidence.
7Knowledge check
Q1. Why is a rising market called "bull"?Show answer
A bull attacks by moving its horns upward.
Q2. What is a common rule of thumb for a bull market?Show answer
A 20%+ rise from a recent low.
Q3. What is a risk during bull markets?Show answer
Overconfidence and excessive risk-taking.